Financing is a central issue in the acquisition of propane fleet vehicles. There is a wide variety of incentives offered at the federal, state and local levels to encourage the expanded use of propane vehicles.
Clean Fuel Vehicle Federal Tax Deduction
The EPA Act established an incentive program for the purchase of Alternate Fuel Vehicles and conversion of conventional gasoline vehicles to alternative fuels. Through the federal Clean Fuel Vehicle Federal Tax Deduction Program, companies and private individuals can offset a portion of the incremental costs associated with the conversion of vehicles or the purchase of an AFV:
Tax deduction is available for the purchase of a new original equipment manufacturer (OEM) qualified clean-fuel vehicle, or for the conversion of a vehicle to a clean-burning fuel. Dual-fuel vehicles qualify, but only the incremental cost associated with the clean fuel will be taken into account.
The deduction cannot be amortized and must be taken in the year the vehicle is acquired or the conversion performed. The amount of the tax deduction is based on the gross vehicle weight (gvw) and type of vehicle.
A tax deduction of up to $100,000 per location is available for qualified clean-fuel refueling property used in a trade or business.
Clean Fuel Vehicle Federal Tax Deductions
The real dollar value of these deductions will depend upon the depreciation method used and the individual or company’s income tax rate. More information on the tax deductions can be obtained by calling the Internal Revenue Service at (800) 829-3676 for a free copy of Publication 535, “Business Expenses,” or by contacting Alternative Fuels Tax Provisions at (202) 622-3110 (ph) or (202) 622-4779 (fax).
The Clean Fuels Grant Program
The Clean Fuels Grant Program was designed to accelerate the deployment of advanced bus technologies by supporting the use of low-emission vehicles in transit fleets. The program assists transit agencies in the following areas:
Purchase of low-emission buses and related equipment
Construction of alternative fuel stations
Modification of garage facilities to accommodate clean fuel vehicles
Assistance in the utilization of bio-diesel fuel
For additional information, go to the Federal Transit Administration (FTA) web site:
U.S. Department of Transportation (DOT)
Federal Transit Administration (FTA)
400 7th Street, SW, Washington, DC 20590
Phone: (202) 366-4000
State and Alternative Fuel Provider Fleets Program
The Energy Policy Act established the State and Alternative Fuel Provider Program that requires state and alternative fuel provider fleets to purchase AFVs as a portion of their annual light-duty vehicle acquisitions. Fleets earn credits for each vehicle purchased and credits earned in excess of their requirements can be banked or traded with other fleets. More information on this program can be found at: http://www.afdc.energy.gov/laws/ or by calling the National Alternative Fuels Hotline at (800) 423-1DOE or (800) 423-1363 or e-mail at firstname.lastname@example.org.
Department of Energy State Energy Program
Under the DOE’s State Energy Program, individual states implement comprehensive State Energy Plans that promote energy conservation, renewable energy technologies, and reduction of dependence on imported oil. Under these plans, grants and/or financial assistance are available to accelerate the use of alternative transportation fuels for government vehicles, fleet vehicles, taxis, mass transit, and privately-owned vehicles. For more information click on your state at: http://www.afdc.energy.gov/laws/matrix?sort_by=incentive
Department of Energy Clean Cities Program
The DOE’s Clean Cities Program coordinates voluntary efforts between local governments and industries to accelerate the use of alternative fuels and to expand the AFV refueling infrastructure. For more information, please see the Clean Cities Web site at https://cleancities.energy.gov/.